The progress of the enormous debts which at present oppress, and will in the long-run probably ruin all the great nations ...
A linguistics sociologist once defined a as something one can smell, touch and feel. African foreign debt is an enormous disaster; its ugly consequences litter everywhere even along the roadsides. Yes, a great disaster indeed! You can smell it, touch it and feel it in Africa’s heartland.
Africa received $540 billion loans between 1970-2002, she paid back $550 billion (i.e. principal with interest inclusive) and she still owned $295 billion as at the end of 2002.
Africa from what we can deduce, has overtly tied herself to the apron string of foreign debt payments. Unfortunately these payments are endless. The borrowed principal has already been paid, yet the interest continues to accrue at a whopping rate. With such a trend, it is erroneous to believe that the continuous rescheduling of the debt payment by Paris club or any other allied group could proffer lasting solution but fire brigade approach. This will only succeed in delaying the great disaster that is lurking behind.
Already the disaster has arrived! The effects of the disaster have commenced amplifying and will continue to permeate to all facets of life in Africa. Without mincing words, the people that are hardly hit by the brunt of the debt services are the poor and the children. Majorities of Africans fall into these categories. It is pathetic to note that qualitative education, good health care, affordable shelter, clean and drinkable water supply, sewage system and reliable power supply have all eluded these poor people. Their government in question has failed in providing basic amenities that will affect them positively, all in the name of servicing foreign financial obligations.
Enough is enough. This abuse and torture meted out on Africa as a result of these foreign debts have diminishing impact on the well being of the continent. Without deferment or holding back, somehow, something must be done to bring this apparent disaster to an end. A sensible and constructive compromise must be reached with the western creditors and international bankers.
It is truism to acknowledge that self inflicted torture rooted in ignorance, naivety and lack of intellectual insight on the part of the greedy and corrupt African leaders, who took out the loans in the first place, created such an agonizing situation.
The western bankers and financial institutions did not twist round African leaders with their little fingers in order to compel them to borrow to their demise. It was their choice to borrow, most times, they were propelled by avaricious inclination and in the process they stole from their constituencies without minding the ensuing retardation it will have on the economy in particular and populace in general. Corruption is and has been the bane of development in Africa.
Most of these debts were accumulated during the cold war. During the era of bipolar world, African leaders were granted loans at the height of cold war for political reasons and these had nothing to do with sound financial decisions. The funds were wasted on some white elephant projects or rather siphoned to some secret bank accounts that were beyond spying eyes of an average African. Most of these loans were acquired without the consent of the citizenry, ironically now; they are the ones absorbing the greatest burden of the loan services.
In Congo, the maximum President, late Mobutu, took out so many loans that were indirectly deposited into his France bank accounts.
Nigeria was granted loans particularly because of her oil wealth, unfortunately some of those loans were more or less not put to good use that would alleviate the sufferings of her people by creating employment opportunities and enabling environment for a sustainable industrial growth. The vast majority of Africans were aware of their leaders’ misadventures but were helpless and as well powerless to compel them otherwise. Even Apartheid South Africa borrowed money without the consent of the black majority. Today who is paying the price? There is this clarion call to African citizens to pay back the loans with the shocking interest rate that was acquired without their blessing. Though this may be inimical to their psyche, the Black South Africans have to pay back the loans of apartheid era. The Congolese have to pay back loans made out to their dictator.
African governments at the expense of their peoples’ livelihood carry out debt payments and in some countries, a great chunk of their GDP is devoted to these loans services. Those funds would have been ordinarily invested in healthcare and education, the two core areas that needed immediate attention in Africa. The money owned to the industrialized nations have so much quadrupled, due to the malleable interest rate. It is beyond anybody’s wildest imagination on how these debts will ultimately be repaid in this lifetime. It will also be inconceivable and fallacy to believe that they can be repaid in this our generation or the one to come, if nothing is urgently done.